- Foreign investors’ body says it looks forward to a major change in taxation structure under Zaidi’s tenure
KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) on Wednesday appreciated the appointment of tax expert Shabbar Zaidi as chairman of the Federal Board of Revenue (FBR).
OICCI President Shazia Syed commented, “Shabbar Zaidi is a well-respected tax professional, who has been closely associated with tax policy and administration in Pakistan for many years. His appointment as FBR chairman is commendable, as it will substantially strengthen the FBR’s capacity.”
Shazia Syed was confident that with the support of a well-experienced FBR team, the new FBR chairman would be able to lead the much-needed transformation in the tax culture, which would subsequently boost tax collection in line with the true revenue potential of the economy.
The OICCI president recalled that in the World Bank’s 2019 Ease of Doing Business (EODB) ratings, Pakistan was assessed as the 17th worst country in the world on the parameter of ‘paying taxes’.
“We are hopeful that with a rejuvenated FBR, supported by close coordination among the provincial tax authorities and the government’s clear direction, the country will significantly improve its EODB rating,” she added.
Shazia Syed further stated that the recently concluded IMF–Pakistan staff level agreement also recommended tangible actions to revamp the tax regime and boost the tax to GDP ratio in line with the relevant international standards.
She said the OICCI members, comprising leading multinationals, contribute about one-third of the total tax collection, the highest by any trade body.
OICCI has already submitted a series of progressive taxation proposals for the 2019-20 fiscal budget to FBR as well as the provincial revenue authorities. The proposals mainly focus on facilitating investment and growth in the economy, including need for long-term incentives to boost foreign direct investment in the large greenfield and job creating manufacturing facilities, and ensuring implementation of predictable, consistent and transparent policies.
The OICCI has also urged the government to revamp the withholding tax regime from over 50 sub-clauses/provisions to less than ten, with number of tax rates reduced substantially, better coordination between federal and provincial legislations, with policies and tax rates harmonized across all jurisdictions, integration of all revenue authorities in such a way that each authority remains functional but with one window solution to file a simplified single return for both federal and provincial taxes.
The OICCI also raised serious concerns on the booming illicit trade with significant damage to revenue base of the economy and urged the authorities to revisit Afghan Transit Trade agreement and introduce structural reforms in customs to stop the highly visible availability of smuggled products.
The overseas chamber has also given workable recommendations, including the use of information technology to substantially improve the documentation of the economy and broadening of the tax base, besides reducing the frequency of interaction of the tax officials with the compliant taxpayers.